Chinese Exports Data Jumps 14%!
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In This Issue.

* Currencies find some wind from Chinese data.

* Metals search for terra firma.

* Commodity Currencies are best performers overnight.

* Richard Russell on Gold.

And, Now, Today's Pfennig For Your Thoughts!

Chinese Exports Data Jumps 14%!

Good day. And a Tub Thumpin' Thursday to you! I'm still dragging the line this morning, so I doubt I'll be doing much Tub Thumpin', but that shouldn't stop you! I almost didn't answer the bell this morning, but in those times, I think about my dad, who never missed a day of work, and say to myself, "Chuck, your dad would get up and get going". And that gets me going.

OK. the currencies and metals drifted about the ocean yesterday never finding any wind in the their sails to take them one direction or the other. But this morning, we have a direction! Although, the price action lately has been very range bound. the ocean I'm talking about is probably about the size of Truman's ocean. (remember Truman the movie?) But the euro is trading over the 1.31 figure this morning. The news from the Eurozone was pretty good this morning, and that is the reason the euro is faring better this morning.

In further evidence that maybe, just maybe, the Eurozone has put the worst behind them, Spain had their first debt auction of the year this morning and found the demand for their bonds to be more than they had scheduled to be sold, and the most important thing was that the yield on the 10-year Spanish Gov't Bond fell below 5% for the first time since last March! The European Central Bank (ECB) is meeting as I write this morning, but I don't expect any great shakes from them to start the year, besides, I don't think the ECB wants to upset the applecart right now. The applecart being the relative calm that has been cast over the Eurozone.

There was good news overnight from China (is that beginning to sound like a broken record?) . Chinese December exports jumped by 14% from a year earlier, which was far better than the forecasts for a 5% increase, and the best figure in 7 months. the Chinese renminbi / yuan is the catalyst for the Asian currencies, as they have wrestled that away from Japan, and with the renminbi recently touching a 19 year high VS the dollar, the other currencies in the region, including Pan-Asia, find that moving higher VS the dollar suits them just fine!

The Pan-Asia currencies of Australia and New Zealand are the best performing currencies overnight. And most of their respective moves have come from the export data that China printed. The Aussie dollar (A$) is touching a high level that it hasn't seen since September, 2008, and then it was going down instead of going up! Remember in August and September of 2008 was the beginning of the financial meltdown, the deleveraging and the flight to dollars, yen and Treasuries.

You may recall me saying late last year, that should the U.S. go over the Fiscal Cliff, that the markets were betting that the U.S. would experience another 2008. I found that to be too Armageddon-like. But if the markets were thinking that, they would have traded that way whether they were too doom and gloom or not. So. at least we're not having to deal with that right now, eh?

Getting back to the A$'s move higher this morning. I've been telling you for about 6 months now that China was turning the corner. and I don't see how this data does anything to dispel that thought. In fact, I would think, and I think it shows in the A$ performance, that the markets believe now that the Chinese recovery has legs. The data should increase the optimism that I've been talking about, and all that is good for the A$ folks. right as rain as my dad used to say!

All the Commodity Currencies are benefitting from the Chinese data overnight. I already told you that the New Zealand dollar / kiwi was a top performer last night, but the Canadian dollar / loonie is pushing higher along with the Norwegian krone, and even the Brazilian real.

Speaking of the real. I met Dennis Gartman about 8 years ago at the New Orleans Investment Conference. He was stealth like on his approach to our booth, and then stood there reading my latest Pfennig, and when I acknowledged him and asked if I could help him, he said, "Hello, I'm Dennis Gartman, I'm happy to meet you Chuck Butler, Mr. Pfennig!" Since that time, I check out what Dennis has to say now and then. He's such a well respected analyst. He wrote something the other day that caught my eye. he was talking about the U.S. production of soybeans, and then pointed out that "Brazil has been inexorably gaining upon the U.S., to the point where this year Brazil's production shall be very roughly equal to that of the U.S. for the first time in history."

He went on to say that "the trend is clear, inevitably Brazil's production shall surpass that of the U.S. and once it has done so shall not likely relinquish that lead again. in our lifetime." -Dennis Gartman from the Gartman Letter.

You know, before Dilma Rousseff rained on our parade, the Brazilian real was a true currency star. OK. I had to stop to sing along with Stevie Wonder's song: My Cherie Amore. What a great song! But I'm back now, and even all the pent up frustration I have with Dilma Rousseff has been washed away by the mellow sound of Stevie Wonder!

Gold & Silver are still trying to find terra firma but are rallying this morning, so maybe terra firma can be found today. I've got some thoughts on Gold from Richard Russell in the TTWS section of the letter today. But for now. Gold is up $6 this morning. but I should add the disclaimer that this is before the NY traders arrive at their desks. wink, wink.

Well. it looks like we'll have a new U.S. Treasury Sec. soon. The President's chief of staff, Jack Lew is expected to be announced as the new Treasury Sec. today. I don't think this shakes things up any, folks. This is like my shirt wardrobe, which contains tons of blue shirts (Omar the tent-maker only has blue fabric to make my shirts!) Some are dark, some are light, some are striped. So, when I say, I'm going to change things up and wear a striped blue shirt, it's still a blue shirt! Or. to use my old saying that I used long before the 2008 VP Candidate started using a variation of it. you can put lipstick on a pig. but it's still a pig, right? You can change Treasury Secretaries with one of the blue shirts in the closet, but it's still a blue shirt.

I saw this on the Bloomberg regarding Jack Lew. "As White House chief of staff, Lew succeeded another too-big-to-fail banker, William Daley, formerly of JPMorgan Chase & Co.

Which leads to this question: Of all the people Obama could pick for Treasury secretary, couldn't he find someone who wasn't an executive at a systemically risky financial institution that took a taxpayer bailout from the Treasury Department?

I'm sure that's clear as mud, but maybe a few get what I'm trying to say there! Sorry for the confusion! And thank goodness we didn't have to deal with the Then There Was This story from yesterday, where I told you that the AIG board was voting on whether to pursue a lawsuit against the U.S. Gov't. You know the same entity that bailed AIG out in 2008. I guess shareholders are going to go ahead and sue the Gov't, but AIG has decided to not take part in the lawsuit. I still shake my head in disgust over this folks.

Then There Was This. I saw this on Ed Steer's letter that's published by Casey Research. It is a quote from the one and only Richard Russell. I've quoted the great Mr. Russell a number of times over the years. But this latest quote is right up my alley, and so with no further adieu here's Richard Russell.

"The amazing bull market in gold stands alone, sneered at and almost hated. I've been in this business for over 60 years, and I've never seen anything quite like it. However, I do think I know something about human nature - it doesn't change. For instance, if a stock creeps up year after year, sooner or later the crowd will discover it -- and then they'll pounce on it, ultimately sending that undiscovered stock far above its reasonable price. My belief is that somewhere ahead, the crowd will latch on to gold. Then, as disinterested in gold as they are now, the crowd will pile into gold with the same frenzy that overtook the storied '49ers' when they packed their bags, kissed their wives and kids good bye, and headed West in search of gold. Gold is the only item that elicits both greed and fear. The greed factor is so well known, I don't have to explain it here. But the fear factor only arises when men see the 'value' of t heir money disappearing. Nothing concentrates the mind as dramatically as seeing the purchasing power of one's hard-earned income and savings being ruthlessly destroyed. - Richard Russell

Chuck again. I absolutely love reading what Richard Russell says. I've never actually met Mr. Russell, although I did attend his birthday party a few years ago. He's friends with my good friends, Mary Anne and Pamela Aden (Aden sisters), and they tell me that he reads the Pfennig! WOW! You should see my chest swelling as I typed that!

To recap. The currencies and metals drifted about all day yesterday, but finally received some wind for their respective sails when China printed a very strong exports (and imports) report for December, thus giving China another notch in their belt that shows how well they are recovering, which was good for the Commodity Currencies and made the A$ and Kiwi the best performers overnight.

Currencies today 11/10/13. American Style: A$ $1.0580, kiwi .8440, C$ $1.0145, euro 1.3105, sterling 1.6050, Swiss $1.0835, . European Style: rand 8.6345, krone 5.5680, SEK 6.5355, forint 222.35, zloty 3.1180, koruna 19.5610, RUB 30.30, yen 88.15, sing 1.2240, HKD 7.7515, INR 54.57, China 6.2238, pesos 12.67, BRL 2.0370, Dollar Index 80.40, Oil $94.50, 10-year 1.88%, Silver $30.55, and Gold. $1,664.00

That's it for today. A long day in the office yesterday, followed by a long night away from home to attend Alex's wrestling match. He didn't fare as well as he did last weekend when he went undefeated in a tournament. But he wrestled well. The ECB just announced that they were leaving rates unchanged, so my no great shakes thought for their meeting held water. I go to have an MRI of my brain this afternoon. I'm sure they'll not find anything there! HA! I head back to Houston next month, and this is all stuff that has to be taken care of before I get there. I demand an Open MRI, I told the girl the other day doing the scheduling, that "they're not getting me into an enclosed tube"! OK. I can't wait for the start of the Hockey season. Now, let's go out and have a Tub Thumpin' Thursday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

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Posted 01-10-2013 5:10 PM by Chuck Butler
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